The GreenWood Ltd. had launched a scheme named as Malamal scheme. The scheme entailed a one-time payment of ₹10,000 in lieu of a unit of 10 Teakwood trees with a holding period of 20 years and on maturity, the contributo

CS Executive · Securities Laws and Capital Markets · PYQS · June 2022
The GreenWood Ltd. had launched a scheme named as Malamal scheme. The scheme entailed a one-time payment of ₹10,000 in lieu of a unit of 10 Teakwood trees with a holding period of 20 years and on maturity, the contributor/investor have an option to get the teak trees or the realised sale proceeds thereof. The scheme was launched by the company for two calendar years. Within such short span of time, the scheme mobilized ₹2 crore from 2,000 contributors/investors. The scheme was being carried on without obtaining registration from SEBI. Referring to the SEBI Regulations, answer the following: What should be the minimum duration of the scheme?

Answer & Explanation:

The duration of the collective investment scheme shall not be of less than three calendar years. The instant scheme is for two calendar year, which is in contravention to the SEBI (Collective Investment Schemes) Regulations, 1999.

Topics: Collective Investment Schemes

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